One common inquiry from clients pertains to app store fees, specifically regarding strategies to circumvent the 30% commission imposed by Apple and Google on revenue generated through their payment systems. This concern is particularly significant for native applications, where a considerable amount of revenue may be affected.
Comprehending the Payment Regulations
When considering the listing of your application on an app store, it is essential to recognize that, for the majority of native apps, there is no straightforward method to completely evade these fees. The guidelines established by Apple and Google are quite explicit: if the service provided through your application enhances the in-app experience, they are entitled to their 30% share.
For instance, applications such as Uber or Airbnb, where transactions occur outside the app (connecting riders with drivers or guests with hosts), are generally exempt from this commission. Conversely, applications that utilize freemium models or offer subscriptions for access to premium content or services (such as media or streaming platforms) are liable for the 30% fee.
Exploring Ambiguous Areas
There exist ambiguous aspects within the guidelines, and with an appropriate strategy, one may discover some degree of flexibility. For example, consider a project we undertook with a premium clothing brand. We established a subscription model; however, the payments were categorized as membership fees to the brand itself, rather than charges for specific features of the application. Since the service was essentially a benefit for members, we successfully circumvented the commission associated with this high-cost subscription model.
Strategies to Minimize or Avoid App Store Fees.
Membership or External Service Frameworks: It may be beneficial to design payment structures as memberships or services that are provided outside the primary functions of the app. This approach necessitates a clear and well-reasoned explanation of how your application aligns with these guidelines.
Web-Based Onboarding: Another viable strategy is to manage user registrations and payments through your website, subsequently guiding users to log into the app post-registration. This approach requires the removal of account management and sign-up processes from the app itself, yet it serves as an effective means to evade fees imposed by Apple or Google on transactions initiated outside their ecosystems.
Testing the Guidelines: Frequently, companies can achieve success by submitting their app and observing whether the guidelines are applied in their specific situation. Apple and Google typically do not impose retroactive penalties on apps once they have received approval, so if you can present a convincing argument as to why your model does not fall under the 30% commission rule, you may find some flexibility.
When the 30% Fee is Justifiable
For nascent products or businesses experiencing gradual user growth, it is often more pragmatic to incorporate the 30% fee into your financial model. Many companies express concern regarding these fees at the outset; however, in the initial phases, revenue may not be substantial enough to warrant extensive efforts to avoid them. Prioritize product development and user acquisition as a primary focus.
A straightforward solution is to include the commission in your pricing strategy—modifying your subscription or in-app purchase prices accordingly.
Consider the Cost of Doing Business with App Store Fees
Ultimately, Apple and Google have established substantial infrastructure that delivers significant value to countless app developers and users. Their payment systems are integral to this ecosystem, and in many instances, the 30% fee is a justifiable expense for gaining access to their platforms. If you can devise innovative strategies to reduce that fee, it is advisable to pursue them. However, there are times when it is more prudent to incorporate this cost into your pricing strategy and proceed, directing your efforts toward creating an exceptional product.
Should you have any inquiries, please do not hesitate to contact us; we are eager to assist you.
